Stock Market : The Calm Before The Storm

Unless and until the FED publicly states it will NOT interfere in markets, the best you can do is stay away from the casino. A Ponzi scheme wrapped in a shell game stuffed in a burrito. The ultra rich will cash out leaving someone else holding the bag. In a deflationary collapse, cash is king. But Once you deposit, it is the banks' money.And Bank bail-ins are NOT ruled out. It will be a good time to pick up some shiny relics of the past before central banks reflate everything to infinity and beyond. physical gold will skyrocket as a safe asset while bonds crash. Then all hell will break loose. Another financial crisis—predicted to be the worst in U.S. history—is on its way. “We have $250 trillion worth of global debt, and interest rates are going up. It’s going to be worse than the Great Depression.” -Gerald Celente, Founder & Director of the Trends Research Institute and widely hailed for warning everyone about what he predicted would be the “panic of 2008.” Legendary investor Jim Rogers, who co-founded the Quantum Fund with George Soros and achieved returns of over 4,200 percent over ten years, said in early 2018 that he expects “a $68 trillion ‘biblical’ crisis poised to wipe out millions of Americans.” On Fox Business last April, he reiterated, “When I said it’s going to be the biggest market downturn in my lifetime, that’s not so strange to me. In 2008, we had a problem because of debt. Debt has skyrocketed since 2008.” Institutional investors (also called "smart money") got out of the U.S. stock market in 2017--they saw the unsustainable corporate debt, the downgrading of investment grade corporations like GE to junk, the retail losses based in part on unmanageable rents and prices rising while wages did not, the real estate downturn once the Fed stopped buying commercial mortgages, the rise of the CLO market pushing corporate loans (like the mortgage-backed securities market had pushed mortgages, just to pool them, prior to 2008), the recent tripling of what FDIC calls "asset problem banks," and of course black swans like Deutsche Bank (with $47 trillion in derivatives), Italy and others teetering on too-big-to-fail collapse. Foreign stock markets have seen significant declines already as the European and Latin American economies contract (ex. China's Shanghai index is down 22% for 2018), and emerging markets' currencies are collapsing under the weight of debt owed in American dollars. That said, many economists and investors foresee a dollar crisis after this next debt crisis, because interest rates have almost nowhere to go from this low height. As for the stock market, the P/E ratio is the highest it's ever been other than the dot-com bubble, volatility matches that of late 2007, and market capitalization is higher than it was even in 1929, after which we saw an 89% stock market crash (50% crash in 1999). So we're in pretty big trouble, and between this month and last, the Dow lost ALL of its gains for the year, and has been down every day for the last two weeks. A much more significant crash is expected in mid-Dec (the downturn/growing credit crisis was ignited by the Fed raising interest rates and beginning to sell off its $4 trillion in purchased assets). The economy has been sustained by the Fed (and other central banks) all this time, and all it has led to is a 49% increase in consumer debt, a 157% increase in student debt, a 122% increase in the fiscal debt, a rise from $170 trillion to $250 trillion in global debt, a 60% increase in leveraged loans, a 52% increase in auto loans, and mortgage and retail defaults are now at their highest in 10 years.














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